Splitting Hairs about Basic Issues

And so it begins… the first day of arguments before the Supreme Court, that the Affordable Care Act, Obamacare, is unconstitutional. The general idea seems to be the government has no business doing anything about healthcare – that is each citizen’s personal responsibly – and has no business interfering with the free market – in this case the insurance market, as if an insurance company makes its profits by insuring only healthy people, unlikely to get sick, and can find a way to suddenly cancel coverage for any policyholder who does get expensively sick, that’s their business, literally – that’s their business model. The government has no business telling a business how to run its business. Let the market work, and if there is a way to make big money insuring the old and sick and unlucky, someone will jump all over it and set up shop immediately. You do need to trust the Invisible Hand, not the government, and also assure that citizens take personal responsibility for their lives. No one else should have to cover the cost of dealing with your heart attack, just because you were so irresponsible, not exercising and eating junk food and maybe smoking – or the cost of you getting old, when your should have put money away for that – or that car wreck that left you all banged up, when you should have been a more careful driver. It’s a free country. You make your choices and live with them. The government would go broke if it had to bail out fools all the time.

And the counterargument is that we’re all in this together, and unexpected things happen to us all, and a large shared-risk pool, where everyone chips in a bit for when the unexpected happens to a few, is something the government ought to set up, or at least oversee and regulate. It takes some of the uncertainty out of life and frees up all citizens so they can do useful things with their short time in this world. And some things are best done collectively – like building roads and bridges and providing national defense and all sort of other things. That’s why governments come into being – they are a response to the realization that some things really cannot be handled effectively individually, or by private for-profit entities. The argument is that healthcare is one of them. The opposition says no it’s not, and now the argument has gone to the Supreme Court.

But if the first day of argument is any indication, all of this will be argued in the specific details:

The Supreme Court on Monday appeared ready to clear away the last remaining obstacle to a historic ruling on President Obama’s health care overhaul. At the opening of three days of arguments, the justices’ questions suggested that they were receptive to a point on which both supporters and opponents of the law agree: that the court should decide the case now rather than waiting until the law’s penalties for not having health insurance become due.

On Tuesday, the court will turn to the central question in the case, the constitutionality of the law’s requirement that most Americans obtain insurance or pay a penalty.

So the first day was about whether to proceed, which was what was agreed, but as Slate’s Dahlia Lithwick, it wasn’t easy:

At first glance, this morning’s 90-minute oral argument in the first of a three-day assessment of the constitutionality of the Affordable Care Act looks something like the court coughing up a big old drama-killing hairball. For one thing, the issue is arcane and hypertechnical: Does a 19th-century statute – the Anti-Injunction Act – which provides that “no suit for the purpose of restraining the assessment or collection of any tax may be maintained in any court by any person” – bar the Supreme Court from even hearing the healthcare cases until someone has refused to purchase health insurance and paid a penalty for it? Since that won’t happen until 2014, the Anti-Injunction Act offered at least one federal appeals court the attractive option of making this whole case disappear for a few more years.

That now looks unlikely to happen. Because both the Obama administration and the opponents of the health care bill want the Supreme Court to decide the suit now, the court had to appoint an outside advocate – D.C. lawyer Robert Long – to argue that the court has no jurisdiction to hear the case. Forty minutes into his argument (which sounded more like a complex tax seminar than a fight over health care) Robert Long didn’t appear to have too many buyers for the idea that these challenges should ripen on the shelf for a few more years. Everyone emerges from court this morning just a little glassy at having been pepper-sprayed by multi-numbered tax-code references for well over an hour.

And here is part of her narrative:

Long does a good job responding to what feels like sequential head-bonkings by one justice after another. But it’s plain that several justices were not going to be able to get past old case law, and others simply doubted whether the health care law is a jurisdictional statute. By mid-morning a general consensus has emerged, as Sotomayor puts it, “that Congress has accepted that in the extraordinary case we will hear the case.”

Justices Sotomayor and Antonin Scalia do a bit of philosophizing about whether there should ever be any jurisdictional rules at all, leading Long to respond that “not all people who litigate about federal taxes are necessarily rational.”

Yes, humor is nice, and in this case revealing, but useless:

Justice Stephen Breyer explains that while he is leaning toward Long on the jurisdiction issue, he has a different problem with deploying the tax law to squash this suit. As he puts it: “Now, here, Congress has nowhere used the word ‘tax.’ What it says is penalty.”

Is it a tax or a penalty? Does that matter? It seems it does:

Both Breyer and Ginsburg question the notion that the purpose of the tax/penalty/tax-penalty provision is to raise revenues. Then Gregory G. Katsas, who represents the private parties challenging the law, gets 20 minutes to explain why the court needs to get on with it and hear the case. He spends a good proportion of that time volleying right up at the net with Sotomayor, and then tries to explain why the challenge here is to the mandate, not the penalty, so the Anti-Injunction Act isn’t an issue. Chief Justice Roberts is doubtful about that: “It’s a command. A mandate is a command. … What happens if you don’t file the mandate? And the answer is nothing. It seems very artificial to separate the punishment from the crime.”

Yes, they were splitting hairs, many of them, and Lithwick has all the details – if you like that sort of thing – and ends with this:

One question is why we went to all the trouble of briefing, arguing, and roping someone in to defend the Anti-Injunction Act, if the court had every intention of blowing off the first gate and hearing all three days worth of argument. That’s the wrong question. The court actually did what it does best this morning – reading complex old statutes (when Kennedy asked Long why the wording of the Anti-Injunction Act was so weird, Long basically replied that’s how people wrote back in 1867), asking practical questions, and reaching what looked to be nearly universal agreement that they’ll hear the case this year. While protestors outside were hollering about religion and freedom, the justices were boring those of us inside almost senseless with statutory construction. And sometimes, check that, most of the time, boring is what the justices do best.

And they’ll tackle the individual mandate and the Commerce Clause next. This was just preamble.

But earlier in the day Paul Krugman looked at the larger issues:

We know, or I think we know, that a single-payer system – in which the government collects taxes, and uses the revenue to provide health insurance – would be constitutional. I mean, I don’t think the court is about to strike down Medicare.

Well, ObamaRomneycare is basically a somewhat klutzy way of simulating single-payer. Instead of collecting enough revenue to pay for universal health insurance, it requires that those who can afford it buy the insurance directly, then provides aid – financed with taxes – to those who can’t. The end result is much the same as if the government collected taxes from those under the mandate and bought insurance for them… It is in no sense more interventionist, more tyrannical, than Medicare; it’s just a different way of achieving the same thing.

And Kevin Drum carries that further:

This whole case has a serious air of angels-dancing-on-the-head-of-a-pin. The individual mandate is enforced by a tax penalty, and if it were called a tax penalty it would be okay. But since it’s called a fine it’s unconstitutional! Congress can tax everyone and then provide them with health insurance – outsourced to a private company if it wants to. But it can’t require everyone to simply buy the exact same health insurance directly for the exact same price!

Yes, it’s kind of nutty, and Drum adds this:

Maybe these distinctions really matter. But to an awful lot of people they sure sound an awful lot like mere excuses to reach a conclusion they want to reach. That’s because, broadly speaking, it’s nearly impossible to argue that Obamacare is even close to pushing the envelope on Congress’s power to regulate interstate commerce. It’s aimed at a particular sector (healthcare) and uses a particular method (the mandate) to accomplish its goals, but lots of acts of Congress use slightly new and different ways of accomplishing legitimate goals. The methods of 1787 just don’t map precisely onto 2012.

We’ll see. If the conservative justices are simply bound and determined to make their mark and overturn Obamacare, they will. But if they do, they’re going to have to torture the law pretty hard to get there.

But on the other side there was this:

Liberals should be concerned about what a future “redneck president” could impose on them if the Supreme Court upholds the healthcare reform law’s mandate that everyone have insurance, Rep. Louie Gohmert (R-Texas) said Monday.

“Let’s say you want to follow this administration’s idea of greatest good for the greatest number of people,” Gohmert said. “It ought to scare liberals to come run and join conservatives, because what it means is when this president’s out of the White House and you get a conservative in there, if this president has the authority under ObamaCare to trample on religious rights, then some redneck president’s got the right to say, ‘you know what, there’s some practices that go on in your house that cost people too much money and healthcare, so we’re going to have the right to rule over those as well.'”

Louie Gohmert doesn’t want the government to do much of anything, ever. There’s a lot of that going around this days.

But the real issues here were best covered by Ezra Klein with Absolutely Everything You Need to Know about Health Reform’s Supreme Court Debut – starting with the individual mandate:

The most-contested part of the health reform law, the Affordable Care Act’s individual mandate requires nearly all Americans to carry health insurance. The legal question centers on whether such a regulation is permissible under the Commerce Clause, which allows the federal government to regulate interstate activity.

What they’ll argue: Health reform opponents contend that the decision not to do something – namely, not buy health insurance – is economic inactivity, rather than activity, and therefore not a behavior the federal government can regulate. Health reform supporters argue that the decision to not purchase health insurance has an economic effect. An individual without coverage, for example, may not have the money to pay for an emergency room visit, sticking hospitals or taxpayers with the bill.

And Klein says this is why this matters:

With no penalty for not purchasing health insurance, but a requirement for insurers to accept anyone still standing, many expect the costs of insurance would skyrocket. Congress could, theoretically, replace the individual mandate with another policy that doesn’t run afoul of the activity-inactivity distinction but it is unlikely that congressional Republicans would permit such a fix, at least in the near term.

And that leads to the issue of severability – whether the health reform law can stand without the individual mandate. The Supreme Court will get an earful on this, on if the Court could strike down that part of the law, while letting the rest of it stand:

The Department of Justice says that if the court strikes down the mandate, it should also repeal the health reform law’s guaranteed issue provision, which requires insurers to accept all customers regardless of their healthcare status. The argument there is that the mandate is so integral to making insurance work – by getting the healthy people to sign up – that, without it, insurance markets could no longer accept all applicants. Opponents of the law go even further. They contend that because of how the law was written – without a clause that specifically noted that individual provisions could be severable – that the whole thing should fall with the mandate.

And Klein says this is important too:

If the Court finds the individual mandate unconstitutional, then severability will become a key issue in determining how much of the law falls with it. It could decide that just the mandate falls, leaving the insurance industry with a pretty big challenge. Or it could rule that the mandated purchase of health insurance is so critical to the health reform law that if it goes down, it takes other key parts of the Affordable Care Act with it.

And then there’s the whole issue of Medicaid expansion, if they ever get to that. This is complex stuff.

But when things get complex sometimes it’s best to step back and consider the basic issue, which Jonathan Cohn does here:

Put aside, for a moment, the fine distinctions of the interstate commerce clause and other constitutional matters the court must ponder. In principle, is the basic obligation that comes with health care reform – to pay for a mutual protection scheme that some individuals might not find advantageous or desirable – really so novel?

Cohn says it’s not:

It’s an obligation most of us meet on a regular basis, every time we get a paycheck.

I’m speaking, of course, about Social Security and Medicare. Each program is a form of “social insurance” and each serves the same basic function: To protect us from financial shocks that we cannot anticipate or avoid. With Social Security, the shock is reaching retirement without enough income. With Medicare, the shock is high medical bills during old age. During our working years, we pay into these programs by handing over portions of our incomes, in the form of payroll taxes. And we don’t have a choice about it, unless we want to start evading taxes.

The Affordable Care Act is also a form of social insurance. It, too, seeks to protect us from problems that we cannot anticipate or avoid: Illness or accident before we turn 65. To get that protection, we must contribute towards its cost – by obtaining a qualified health plan on our own or, failing that, paying a fee to the government. The government then uses that fee to finance the provision of health care services for those who couldn’t pay for it on their own. The obligation is, if anything, less onerous than the one for Medicare and Social Security. By law, the government cannot impose criminal penalties on people who fail to meet the mandate. The worst the government can do is to withhold future tax refunds.

And this leaves him puzzled:

So why is the Affordable Care Act such an unconscionable infringement of liberty, while those two other, more revered programs are not? Some critics have suggested the Affordable Care Act is fundamentally unfair, because it effectively requires relatively healthy people to subsidize relatively unhealthy people. But that is true of Medicare and Social Security, too. The whole point of any social insurance is to ameliorate the impact of sheer chance on life – whether it’s being born with the wrong genes, growing up in the wrong neighborhood, or coming into contact with the wrong physical threats. Social insurance programs redistribute funds from the lucky to the unlucky, on the very sensible theory that any one of us could end up unlucky (and, at one point or another in our lives, probably will).

And the irony here is that Medicare and Social Security are real government programs:

The bureaucracies that run Medicare and Social Security actually distribute the benefits, in the form of checks or payments to health care providers. The Affordable Care Act is a more privatized system, in which private insurance companies are the direct financiers of benefits for many people. But even that distinction is blurrier than it might seem. Medicare has long offered beneficiaries the option of enrolling in private insurance plans, rather than the government-run program. And today about a quarter of all beneficiaries do just that. Those companies operate under close government supervision and regulation, it’s true. But so will the companies offering insurance through the Affordable Care Act.

And thus the Affordable Care Act is a full market-based system, without any public program at all – you buy private insurance, through your job or in the market place, but it is private insurance:

This is a bug, not a feature, as far as liberals like me are concerned. But it’s difficult to see why conservatives would believe this makes the law more intrusive than Medicare or Social Security. The idea behind channeling coverage through private insurance, and the rationale behind excluding a public plan from the options, is to allow the free market more room to operate.

Conservatives should know this better than anybody, because they have spent a generation making this argument and lobbying to privatize all social insurance. They’re the ones who keep trying to transform Medicare into a voucher system. They’re the ones who talk about replacing Social Security with a system of private investment accounts.

Perhaps conservative are confused:

The legal justification for Medicare and Social Security comes from the federal government’s power to levy taxes. And even some judges who have ruled in the favor of the Affordable Care Act have said (wrongly, in my view) the government cannot make that claim, because advocates didn’t use the term enough when debating the law.

But insofar as the legal case against the Affordable Care Act rests upon a broader argument about liberty, it doesn’t make a whole lot of sense – unless the critics of healthcare reform are ready to junk Medicare and Social Security too. Something tells me they’re not.

Of course they’re not. Angry elderly white folks on Medicare and Social Security are the base of the Republican Party, and elsewhere Cohn says this:

Government may regulate what the plaintiffs call “inactivity” when it is merely a prelude to an inevitable activity that government has the right to regulate. Since getting sick and consuming medical services is inevitable, and since even (most of) the law’s critics acknowledge the government can regulate the way sick people pay for their medical care, the mandate is acceptable.

And it’s not, as many on the right now say, like the government, with its now scary unlimited power, telling you that you have to eat your broccoli:

A government mandate to buy broccoli would not satisfy this limiting principle, because not everybody will eventually consume broccoli. Similarly, a government mandate to buy a GM car might not pass muster because not everybody will eventually buy a GM car. Broader mandates, on the other hand, might work. Congress could, for example, force everybody to obtain food vouchers, join a grocery club, or demonstrate they had plans for paying for their food – paying some sort of fine if they did not. And Congress might be able to pass a law requiring everybody to get a car, obtain a transit pass, or, again, pay a fee to offset the costs of future transportation.

These would be constitutional because everybody really does need to eat – and everybody, or almost everybody, has to get places from time to time. Of course, such laws would also be really stupid. Congress can, presumably, find better ways of preventing hunger and providing adequate transportation. But, as Justice Elana Kagan noted at her confirmation hearings, the constitution doesn’t prohibit stupid laws – only ones that violate liberty.

But Cohn says this is beside the point:

The government won’t need to give a new limiting principle if the justices think the mandate falls within existing constraints on the commerce and “necessary and proper” clauses – or if they believe it’s a legitimate exercise of the government’s authority to tax.

But that’s an underlying issue here too. Shouldn’t everyone just be allowed to keep all the money they make – as Michele Bachmann argued? The counterargument is that we’re all in this together, and unexpected things happen to us all, and a large shared-risk pool, where everyone must chip in a bit for when the unexpected happens to a few, is something the government ought to set up, or at least oversee and regulate. And now that’s the issue – true freedom, and whether we need a government at all, really. This is just the first wedge in that larger argument.


About Alan

The editor is a former systems manager for a large California-based HMO, and a former senior systems manager for Northrop, Hughes-Raytheon, Computer Sciences Corporation, Perot Systems and other such organizations. One position was managing the financial and payroll systems for a large hospital chain. And somewhere in there was a two-year stint in Canada running the systems shop at a General Motors locomotive factory - in London, Ontario. That explains Canadian matters scattered through these pages. Otherwise, think large-scale HR, payroll, financial and manufacturing systems. A résumé is available if you wish. The editor has a graduate degree in Eighteenth-Century British Literature from Duke University where he was a National Woodrow Wilson Fellow, and taught English and music in upstate New York in the seventies, and then in the early eighties moved to California and left teaching. The editor currently resides in Hollywood California, a block north of the Sunset Strip.
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